Market Measures - February 9, 2021 - Sideways IV and Option Profitability
The primary source of profit for short premium positions is IV contraction.
However, since the extrinsic value of an option decreases with time due to theta decay, it is still possible for short premium to be profitable without significant changes in implied volatility.
Join Tom and Tony as they look at how profitable short premium strategies may be when IV is sideways.